MANUFACTURERS in Britain are continuing their slow crawl back to growth, despite facing uncertain conditions, according to a survey.

The UK industry is edging back to growth despite facing uncertain conditions

The survey of almost 350 companies by the EEF found the difficult world economy, ongoing effects of the cutback in oil and gas investment, and the steel crisis, as well as uncertainty from the EU referendum, all had an impact on manufacturers and contributed to the “subdued” conditions, but the longer-term outlook was more positive.

The forward-looking indicators are more positive for the second half of the year, though this could be affected by the EU vote result, according to the report.

The EEF said there were “tentative” signs that manufacturing will emerge from the “trough” later this year, although the research revealed continued weakness of investment plans.

These expectations will need to be realised before an increase in investment plans follow suit

EEF chief economist Lee Hopley

EEF chief economist Lee Hopley said: “Conditions in manufacturing at least seem to be heading in the right direction, but the climb back to growth is still being challenged by the sluggish global economy and subdued investment at home.

“Some sectors continue to buck this trend, however, with chemicals and the transport sectors continuing to show growth.

“Furthermore, signs that the massive issues facing the mechanical and metals sectors are bottoming out bode rather better for growth in the second half of the year.

GETTY

The construction industry is eyeing a return to solid growth

“These expectations will need to be realised before an increase in investment plans follow suit.

“While we’ve got some weaker readings in the domestic market and softer confidence levels amongst smaller companies in our survey, the hunt for the first concrete signs of referendum-related uncertainty effects on the economy continues.

“Assuming it’s a vote to remain, we expect manufacturing to remain broadly flat in 2016 for the second year running.”